Enterprise Bill

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Mr. Waterson: My hon. Friend is developing a fascinating line of argument, which we might reconsider during the stand part debate. If one expects the same standard of product, there might be an argument also for expecting the same price, although there is always the question of regional variations. Is a dentist or a plumber expected to give a standard service? Presumably, some dentists, like some plumbers, are better than others and may warrant a higher fee. I am sure that my hon. Friend was coming to the issue of consumers being able to shop around and ask more than one dentist what he or she charges, but many people would be in the dentist's chair, anticipating the pain, and would not think about the price until afterwards. That is their prerogative. This is a fascinating discussion.

Mr. Djanogly: It is indeed. When Which? looks at prices, especially of services–such as those provided by dentists or lawyers–there are often more considerations relating to price, such as the service that the consumer receives. Of course, I congratulate the Consumers Association on advising consumers of the various prices and telling them where they can get a cheap deal, if that is what they want, but that is a different issue.

I am not trying to pre-empt the OFT inquiry into dentistry. I am taking my information from the

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Consumers Association briefing paper, as I have not seen the OFT report, but that information is backed up by a recent briefing from the National Association of Citizens Advice Bureaux. To return to the issue of what are legitimate grounds for a claim, the Consumers Association seems to be starting a new industry, in which it, rather than the law, tells us what is right and wrong for consumers. The briefing paper says

    ''As we understand it, it would be possible for a designated body to make a complaint on the grounds that a particular trader is conducting his business in a manner which is unfair and detrimental to consumers. This could encompass engaging in practices and sales techniques which are not presently illegal but are nevertheless unfair and harmful to consumers. Our concern is whether in these types of case the OFT would have any powers to act, if the complaint was found to be unjustified.''

In other words, even though a practice may not be illegal, NACAB wants it to be possible for the practice to be referred to the super complaints process. I wonder how many hon. Members appreciate that that is what we are talking about, because it is a dangerous proposition that consumer associations should take the lead in dictating what is illegal. We heard earlier that we should, perhaps, be considering what other bad trading practices should be made illegal. That is a valid argument, but I have significant concerns that, even before they get the powers, consumer associations are saying that they, not Parliament, should decide what is illegal. That is something that the Committee should consider carefully.

The size of the offence is relevant to mergers. There is a de minimis provision; in other words, if a complaint is below a certain level, it will not be dealt with under the Bill. However, I believe that that does not apply to clause 11. I ask the Under-Secretary for clarification, but if I am right, no complaint would be too small for the OFT to consider. It would have been sensible, as with the merger regulations, to have a level below which it was considered that the regulations should not apply.

Mr. Barnes: The Oxford philosopher and great socialist thinker G.D.H. Cole wanted to transform Parliament into two Houses, one of which would be a House of consumers and the other of which would be a House of producers. They would have equal and co-ordinate powers. I wonder whether the provision on the super complaints procedure for consumers should not be mirrored by a super complaints procedure for producers, or workers.

Mr. Mark Field: I shall not comment on the contribution of the hon. Member for North-East Derbyshire, not least because it would take me a long time to get my head around the idea.

The clause is extremely important. It is at the core of many of the concerns that we shall discuss on other amendments; if not this evening, at some time on Thursday. My hon. Friend the Member for Huntingdon pointed out to me one of the great fallacies in connection with price in competition or monopolistic power. It is that if we have perfect competition or a monopoly, logic and economic theory dictates that the price will be exactly the same. It is therefore difficult to make a coherent case

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that price should be the determining factor for competition ills.

The CBI suggests equality of treatment and that the Government should hear all complaints equally. The concept of a super complainant procedure is cause for great concern, because people will assume that complaints have substance if they are put forward by a consumer group on that elevated scale. It seems that complaints will automatically get over the first hurdle if they are made by a super complainant. If legislation is to work properly, it is essential that it should treat all people in the same way. A complaint from a super complainant should be made as if it had come from an individual or another company.

Miss Johnson: I shall endeavour to sum up this diverse debate and answer all the points raised on the subject. First, it is important to reflect on why we are going along this path. It is rather difficult for individual consumers to identify market failure, market abuse and bad market practices of one kind or another. It is important to bear that in mind when considering the issues raised today.

Mr. Field: Surely that is counter-intuitive with regard to events of the past 20 or 30 years. Those who have been Members of Parliament for any length of time–and Ministers, too–must have dealt with an enormous number of individual complaints. In a sense, the consumer has become liberated and is able to make complaints. The worry is that consumers may not know the most appropriate way to make those complaints, but the idea that they are powerless and require a super complainant body surely runs in the face of experience.

Miss Johnson: I take it that the hon. Gentleman is referring to our experience as Members of Parliament. Obviously, in representing people, we see many difficulties in various aspects of their lives. I accept that we have a wider view from that perspective, but the individual consumer has their own experience of engaging in the market and buying goods and services. However, although they may have access to the informal experience of others, they do not have that wider view. We are considering super complaints in that context.

A concern is floating around that people may make frivolous super complaints and that organisations that are authorised to act in this capacity–that will be a careful process in itself–will come forward with something that is not sensible. I can assure the Committee that organisations will be expected to base their complaint on a reasoned case. If they do not, the OFT will take no action beyond initial consideration. Equally, the OFT must publish its reasons for what, if any, action it proposes to take. The process cuts both ways; the OFT is held to account, and groups will submit reasonable super complaints because they will not want to end up with

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bad publicity and damage to their reputation. That is a crucial part of their credibility with consumers and the wider public.

Mr. Djanogly: The Under-Secretary says that consumer groups will not want to lose their good image. It would be helpful if she could explain what she means by ''consumer groups''.

Miss Johnson: I am talking about any group that is authorised to act as a super complainant and is recognised as a potential super complainant. There will be criteria for that. We do not expect any group to act in that way; the groups will be designated. That designation will involve their demonstrating responsibility and certain other capacities for making such complaints.

I should now like to wrap up the debate, and I will take no further interventions if possible. The OFT will issue guidance on the substance of the complaint. That is about markets, not individual businesses, so we are not covering trivial complaints. On the competition side and the question of complaints where practices are not yet illegal, the result could be market investigations to order by the Competition Commission to stop anti-competitive practices in a particular industry. On the consumer side, there could be codes of practice to enshrine best practice. However, the OFT is not a law maker. Significant harm must be done to consumers before the OFT will decide what, if any, action to take, and that action must be based on that complaint.

The OFT can determine which of its competition or consumer points it should use if necessary. The complaint must be reasoned, and as I said the OFT must publicise its response. The whole process is open, reasoned and founded on OFT duties on behalf of consumers and business. I can reassure hon. Members who have contributed to the debate that the issues will be taken forward on those terms by super complainants and the OFT.

I find it hard to answer the point made by my hon. Friend the Member for North-East Derbyshire, because it requires a great deal more thought than I can give it at the moment.

Mr. Waterson: I am thoroughly looking forward to the amendments that the hon. Member for North-East Derbyshire will no doubt table on this novel idea. We will doubtless have some interesting debates on them in due course. The amendments were probing. We tabled other amendments to clause 11, which is an important clause for consumers and business as it seeks to ensure that everyone understands how the new mechanism will work. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Further consideration adjourned.–[Mr. Pearson.]

Adjourned accordingly at Seven o'clock till Thursday 18 April at half-past Nine o'clock.

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The following Members attended the Committee:
Beard, Mr. Nigel (Chairman)
Atkins, Charlotte
Barnes, Mr.
Borrow, Mr.
Burnham, Andy
Cable, Dr.
Campbell, Mrs. Anne
Djanogly, Mr.
Field, Mr. Mark

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Hendry, Mr.
Irranca-Davies, Huw
Johnson, Miss
McWalter, Mr.
Pearson, Mr.
Pugh, Dr.
Purchase, Mr.
Thomas, Mr. Gareth R.
Waterson, Mr.

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